Wipro CFO says revenue growth to pick up in FY16

On recently-appointed COO Abid Ali Neemuchwala’s chances of staking out the top job, Senapathy said he remained “a possible contender”.

Excerpts from an interview:

Q: What will be Wipro's approach to acquisition?

A: When you talk about the Internet of Things, when you talk about artificial intelligence, when you talk about big data clearly these are emerging technologies and something that you can invest on yourself and do it.

But there are many others happening around yourself and therefore trying to either take strategic stakes like we have done with Opera and multiple of other companies or even look for opportunities of acquisition where there is much more service orientation and lesser product orientation. Clearly [these are] the areas which have been identified and the company will stay focussed on.

Q: In the IT industry all the companies are now looking at newer technologies. What is the level of technology that is applied now and in how many years can we see it have an impact on the IT industry’s margins?

A: You have seen over the years Indian IT companies have been able to sort of hold on to the margin of EBITDA as a percent to sales and some companies are below 20 and some are above 20 and we have been ahead of 20 for many years now.

So I wouldn’t say that over the following years there is any amount of – and particularly in the medium to long term there will be any kind of issues around margin profitability as a percent to sales unless the model of execution which is currently almost like a two thirds to one third.

Two third from a low cost country and one cost from a high cost country changes and I don’t see that changing in the next five years and therefore the percent of profitability as a percent to sales while short term can change but in the medium to longer term are unlikely to change.

Q: You are leaving at a time when the company is undergoing a shift in terms of operations and functions. Is there a possibility for Wipro to face a possible change in the demand environment going forward?

A: Europe is a problem today but we are not seeing a problem vis-à-vis ability to get business there because the pressures on the economic standpoint are of a different nature than it is in the US. So US is more on change in the business, here it is more in terms of taking away cost and enhancing productivity and those kind of things.

So therefore the time to my mind is a very appropriate time because A: there is pretty decent stable business and the growth rates are only looking up except for the cost currency impact you will see consistently the industry has been delivering better growth rates.

We are already on the right path because what we grew about 5 percent points year before i.e. 2013-14 we are almost doubting it in the current year on a constant currency basis and therefore the trend is looking good and I would say therefore that this is the right time when Jatin is completely ready with 13 years of experience and the kind of global experience that he brings in having worked in Europe and the various functions that he has done and aids to his advantage this is the best opportunity which we think will be the least disruptive for this kind of a change.